Long Island’s $2 Million-a-year Counterfeiting Problem

The Secret Service’s mission—even before it was tasked with protecting the president of the United States—was to suppress counterfeit currency. The job hasn’t gotten any easier, though redesigns of the bills and security enhancements in the 1990s and 2000s has forced counterfeiters to adjust with the changes.

In 2011, the Secret Service collected $154 million in counterfeit U.S. currency worldwide, arresting 2,471 people in the United States and 386 more suspects internationally.

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Between 2006 and 2010 the total dollar value of foreign and domestic U.S. counterfeit currency seized before it was circulated grew every year except one, and ballooned to $270 million in 2010, according to Secret Service statistics. The total dollar value of fake bills passed on to the public also increased during that time, from $64 million in 2006 and 2007 to $85 million in 2010, according to the data.

Counterfeit currency is only .02 percent of the total circulation currently in the United States. But that hasn’t stopped Agent Seremetis from protecting innocent shop owners from counterfeiters.

“Although that’s a very, very small number,” he says, “a $100 bill being passed to a mom-and-pop shop or Macy’s could affect them financially. We take it very seriously.”

The problem for small businesses and other retailers is that cashiers rarely do a double-take when they’re handed notes with lesser denominations, says one small business advocate who assists hundreds of businesses a year.

Counterfeiting hurts the little people, who are already struggling to stay afloat during this tumultuous economic time because any bogus bills that are discovered eventually become the property of the Secret Service and the amounts shown are not refunded to those unlucky enough to be stuck holding them.

“When it comes to small businesses and sometimes the margins they work at, especially in these economic times, any kind of loss of revenues affect the business,” says Lucille Wesnofske, director of the Farmingdale Small Business Development Center. “They should be aware, and just like if somebody walked in their store and they started noticing something being stolen all the time, they would start taking action…they’ll be more alert. They’ll put up something to prevent theft. It’s the same thing. It’s theft, it’s affecting their bottom line.”

While the Secret Service continues its core mission of suppressing counterfeiting, other agencies, such as U.S. Customs and Border Protection (CBP), also play a crucial role in suppressing the deceptive and costly fraud.

On May 8, 2012, Katherine Velez took a flight from Bogota, Colombia, landing at John F. Kennedy International Airport at 6 a.m. Lining the inside of her two suitcases were allegedly 1,412 $100 bills, which totaled more than $140,000, according to the agency. Just two days earlier CBP officers had discovered $68,000 in counterfeit $100 bills at the JFK mail facility.

According to the criminal complaint against Velez, she told authorities she “borrowed the black Explora suitcase from her aunt and that she didn’t know there was counterfeit currency inside.”

A month earlier, CBP officers had arrested Marco Chavez, who arrived at JFK from Lima, Peru, with $599,400 in counterfeit bills allegedly hidden in packages inside picture frames, books and purses. He told officers that a friend asked him to sneak the packages into the country in exchange for $1,500. He also claimed that he had no idea he was traveling with thousands of dollars in artificial U.S. currency, according to court documents.

“We’re on the front lines,” says Anthony Bucci, a CBP spokesman. “We’re the first line of defense.”

It’s no surprise to authorities that such large sums of money are emanating from Peru and Colombia, two hotbeds for counterfeit production—the Secret Service and CBP have been disrupting its flow there for years.

And it’s not just counterfeit money that’s the problem. Every week, CBP officers discover treasure troves of counterfeit items that read like an inventory list for a massive flea market: laundry detergent, water guns, designer handbags, Timberland boots, Spider Man lunch bags, Lee jeans, and a number of other seemingly random products fraudsters aggressively attempt to sell at a discounted price.

“If you can name it, we’ve seen it counterfeit,” says Bucci. “And that’s not an exaggeration.”

“We’ve been combating this problem since 1865,” says Milien of the Secret Service. “It’s always been a problem.”

In August, a Freeport man was busted at Pet Supplies Plus in Oceanside when he tried to return items he paid for with counterfeit money in order to get real money, according to police. The store caught on to his plan, and he was arrested when he returned.

Seven months earlier a Hempstead man was arrested after using 16 counterfeit $100 bills to make a purchase at the Adidas store in Roosevelt. Another man tried to pull off the same crime in June, this time at Target in Westbury. Similar counterfeiting crimes have popped up at retailers all over Long Island.

While the technology that counterfeiters utilize may be state-of-the-art, the practice dates back to Colonial times, when Patriots and Redcoats were bloodying fields with muskets and bayonets. Counterfeiting originated as a war tactic by the British over our country’s birth.

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